DEPARTMENT OF JUSTICE DRUG ENFORCEMENT ADMINISTRATION. [Docket No ] MARGY TEMPONERAS, M.D. DECISION AND ORDER

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1 This document is scheduled to be published in the Federal Register on 08/01/2012 and available online at and on FDsys.gov DEPARTMENT OF JUSTICE DRUG ENFORCEMENT ADMINISTRATION [Docket No ] MARGY TEMPONERAS, M.D. DECISION AND ORDER BILLING CODE: P On December 15, 2011, Administrative Law Judge (ALJ) Timothy D. Wing issued the attached recommended decision. Neither party filed exceptions to the decision. Having considered the entire record, I have decided to adopt the ALJ s recommended rulings, factual findings, and his legal conclusions, except as discussed below. 1 I further hold that the record establishes that Respondent engaged in acts which are sufficiently egregious to warrant the revocation of her registration and that she has not rebutted this conclusion. 2 1 All citations to the ALJ s recommend decision are to the slip opinion. 2 In discussing the public interest factors of 21 U.S.C. 823(f), the ALJ conclude[d] that the reference in 21 U.S.C. 823(f)(5) to other conduct which may threaten public health and safety would as a matter of statutory interpretation logically encompasses the factors listed in Section 824(a). ALJ at 19 n.24 (citing Kuen H. Chen, M.D., 58 FR 65401, (1993)). To be sure, the Agency decision in Chen stated that [t]he administrative law judge has concluded here that the reference in 21 U.S.C. 823(f)(5) to other conduct which may threaten the public health and safety would as a matter of statutory interpretation logically encompass the bases listed in 21 U.S.C. 824(a). 58 FR at However, whether this constitutes a holding or merely dictum, Chen is totally devoid of any indication that the traditional tools of statutory construction (i.e, text, structure, statutory purpose, and legislative history) were employed in reaching this conclusion. Indeed, while factor five focuses on other conduct, several of the grounds for revocation are based on a registrant s status and do not require inquiry into the nature of the underlying conduct. See 21 U.S.C. 824(a)(3) (authorizing revocation where registrant has had his State license or registration suspended, revoked, or denied by competent State authority and is no longer authorized to engage in controlled substance activities or such sanction has been recommended by competent state authority); id. 824(a)(5) (authorizing revocation where registrant has been excluded or is subject to exclusion from participating in federal healthcare programs under mandatory exclusion provisions). In addition, construing factor five in this manner renders superfluous factor one, which authorizes the Agency to consider the recommendation of the state licensing board or disciplinary authority, as well as the provision of section 823(f) stating that the [t]he Attorney General shall register practitioners... if the applicant is authorized to dispense... controlled substances under the laws of the State in which he practices. Finally, it should be noted that since shortly after the CSA s enactment and years before section 823(f) was amended to include the public interest factors, DEA has consistently held that where a registration can be revoked under section 824, it can, a fortiori, be denied under section 823 since the law would not require an agency to indulge in the useless act of granting a license on one day only to withdraw it on the next. Serling Drug Co. v. 1

2 The ALJ s Footnote 9 Among the allegations raised by the Government were: 1) that Respondent had failed to include required information on various prescriptions (such as a patient s address) in violation of 21 CFR (a); 2) that she failed to take initial and biennial inventories of the controlled substances she obtained and dispensed, in violation of 21 CFR (b) & (c); and 3) that she failed to properly complete various order forms for schedule II controlled substances (DEA Form 222), in violation of 21 CFR (e). ALJ Ex. 1, at 3 (Order to Show Cause). According to the record, the prescriptions were seized pursuant to a search warrant executed at a local pharmacy. Tr As for the inventories and DEA 222s, these were apparently seized during the execution of a search warrant at Respondent s registered location. At the hearing, Respondent s counsel requested that the Government turn over the prescriptions, see Tr ; some fifty DEA Form 222s, see id. at 80-81, ; and the daily inventories done by the employees of Respondent s dispensary. Id. at 423. The Government objected to each of these requests on the ground that there is no right to discovery in these proceedings. See id. at 80, 128, 423. The ALJ denied each of these requests, explaining in his opinion that the requests were untimely and unsupported by applicable legal authority. ALJ at 6 n.9 (citing Roy E. Berkowitz, 74 FR 36,578, 36,760 (2009) (holding that there is no general Detroit Prescription Wholesaler, Inc., 40 FR 11918, (1975). See also John R. Amato, 40 FR (1975) (Denying application where practitioner s state license had been revoked, holding that section 823(f) must logically give the Administrator the authority to deny a registration if the practitioner is not authorized by the State to dispense controlled substances.... To hold otherwise would mean that all applications would have to be granted only to be revoked the next day under 21 U.S.C. 824(a)(3). This [A]gency has consistently held that where a registration can be revoked under section 824, it can, a fortiori, be denied under section 823. ). Indeed, no court has ever questioned the Agency s longstanding and consistent interpretation that it has authority to deny an application on any of the grounds set forth in section 824(a). Cf. National Muffler Dealers Assn., Inc., v. United States, 440 U.S. 472,477 (2011) ( A regulation may have particular force if it is a substantially contemporaneous construction of the statute by those presumed to have been aware of congressional intent. ); EEOC v. Associated Dry Goods Corp., 449 U.S. 590, 600 n.17 (1981) ( a contemporaneous construction deserves special deference when it has remained consistent over a long period of time ). 2

3 right to discovery under either the APA or DEA regulations ) (citing Nicholas A. Sychak, d/b/a Medicap Pharmacy, 65 FR 75, ,961 (2000))). While I adopt the ALJ s rulings, I do so only because the requests were untimely. In his Supplemental Pre-Hearing Ruling, which was issued on August 5, 2011, the ALJ made clear that [a]ny requests for subpoenas by either party are to be filed no later than 4:00 pm. EDT on August 26, ALJ Ex. 8, at 7. Respondent did not comply with the ALJ s order and instead waited until the hearing to request the documents. Respondent, however, had notice of the Government s intent to litigate these issues from the outset of the proceeding; thus, she cannot claim that she was unaware until the hearing that she would need the various documents to respond to the allegations. 3 Because Respondent failed to timely request the documents, the ALJ properly denied those requests. 4 The ALJ s Legal Conclusions Regarding Respondent s Operation of a Dispensary 3 Moreover, having reviewed the record, it contains substantial evidence (as the ALJ found) to support each of these allegations. 4 That there is no general right to discovery in these proceedings would not have barred a timely request for these documents. Respondent did not seek broad-based discovery of whatever the Government had obtained in the course of its investigation, but rather, specific documents which were clearly relevant and material to these three allegations because they are the very basis for the three allegations. Thus, if the requests had been timely, this case would have been governed by the principle that [d]iscovery must be granted if in the particular situation a refusal to do so would so prejudice a party as to deny him due process. McClellan v. Andrus, 606 F.2d 1278, 1286 (D.C. Cir. 1979) (noting that report was subject to discovery in administrative proceeding because it was potentially uniquely relevant to appellant s case and ordering agency to turn over report to administrative tribunal for in camera review to determine relevancy and to allow Government to assert any claim of privilege). See also Echostar Communications Corp. v. FCC, 292 F.3d 749, 756 (D.C. Cir. 2002) (noting that McClelland was seeking a specific document uniquely relevant to [his] case ). See also 5 U.S.C. 555(d) ( Agency subpoenas authorized by law shall be issued to a party on request and, when required by rules of procedure, on a statement or showing of general relevance and reasonable scope of the evidence sought. ). See also 21 U.S.C. 875 & 876. As the Agency has previous noted, under Goldberg v. Kelly, 397 U.S. 254, 270 (1970), where governmental action seriously injures an individual, and the reasonableness of the action depend on fact findings, the evidence used to prove the Government s case must be disclosed to the individual so that he has an opportunity to show that it is untrue. Beau Boshers, M.D., 76 FR 19401, (2011) (quoting 397 U.S. at 270). Moreover, the Supreme Court has further explained that the Due Process Clause forbids an agency to use evidence in a way that forecloses an opportunity to offer a contrary presentation. Id. (quoting Bowman Transp., Inc., v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 288 n.4 (1974)). Where the Government alleges that one has failed to properly maintain or complete required records, it cannot seize those records and then refuse to turn them over in response to a timely request for them. 3

4 The gravamen of the Government s case was Respondent s operation of a dispensary, which in the Government s view was illegal because Respondent dispensed thousands of controlled substance prescriptions which were issued by her father, who was not registered at the location of Respondent s practice, and Respondent does not hold a pharmacy registration under the Controlled Substances Act. See ALJ Ex. 1, at 1. The evidence showed that beginning in either November or December 2008, Respondent began dispensing controlled substances at her practice location and that during the period in which it operated, the dispensary filled 3,397 prescriptions for controlled substances issued by her father, most of which were for oxycodone, a schedule II narcotic, and Xanax, a schedule IV benzodiazepine. Tr In addition, the evidence showed that the prescriptions were filled and delivered to the patients by employees who were not licensed as pharmacists. The ALJ concluded that Respondent violated Ohio law because she was not licensed as a Terminal Distributor of Dangerous Drugs and did not fall within the exemption provided under state law for a business practice with a sole shareholder who is a licensed health professional. See ALJ at 21 (citing Ohio Rev. Code Ann (B)(1)(j)). 5 The ALJ based his reasoning in part on the evidence showing that Respondent established, solely owned, and operated two limited liability companies, Unique Pain Management ([her] medical practice) and Unique Relief ([her] dispensary), both of which are located at 418 Center Street, Wheelersburg, Ohio, and that the two entities were physically separate from each other, although Respondent could observe the dispensary through a system of security cameras and a monitor she maintained in her office. 5 The ALJ also noted that an Ohio Board of Pharmacy guidance document, which interprets this provision, states that if the business practice has a single prescriber... who is the sole shareholder, member, or owner of the practice, then this business practice is not required to be licensed as a Terminal Distributor of Dangerous Drugs with the Ohio Board of Pharmacy. Previously, this exemption was only for a prescriber who practices as a Sole Proprietor. ALJ at 21 (quoting Ohio State Board of Pharmacy, Licensing Issues For Prescribers Updated (July 2008)). 4

5 Id. The ALJ also noted that the dispensary also filled a significant portion of the prescriptions issued by Respondent s father. Id. at 22. Continuing, the ALJ reasoned that: [t]o the extent Ohio law permits a sole practitioner to dispense or personally furnish controlled substances directly to a patient without a Terminal Distributor license, Respondent s dispensing practices were well outside of those parameters. Respondent established a distinctly separate legal entity to fill prescriptions that was physically separate from Respondent s medical office. Furthermore, Respondent s dispensary was not limited to filling prescriptions issued only by Respondent, but also routinely filled prescriptions issued by Respondent s father, notwithstanding the fact that Respondent did not have a Terminal Distributor license as required by state law. Id. (citing Ohio Rev. Code Ann (B)(1)(j) & ). However, I need not decide whether under Ohio law, Respondent s creation of a distinctly separately legal entity to fill prescriptions, id., required her to hold a Terminal Distributor license, because the Government did not raise this issue in either the Order to Show Cause or its pre-hearing statements. Nor are the few fragments of testimony regarding this license (which primarily involved the Board of Pharmacy Compliance Agent s statements regarding the reason for his February 2011 visit to the dispensary) sufficient to conclude that the parties litigated the issue by implied consent. Indeed, any such conclusion is belied by the fact that when Respondent s counsel attempted to question the Board s Compliance Agent about whether a Board employee had told Respondent s staff that she did not need to have a Terminal Distributor s License, the Government objected that the questions were outside the scope of direct examination as well as irrelevant and the ALJ sustained the objections. 6 Tr Subsequently, Respondent succeeded in eliciting testimony from one of her employees regarding a phone conversation he had with an employee of the pharmacy board regarding whether she was required to have a Terminal Distributor s license. Tr However, given that the Government had already argued that this line of questioning was irrelevant, which it was in light of the Government s failure to disclose its intent to litigate the issue in either the Show Cause Order or its pre-hearing statement, I conclude that this testimony is not enough to establish implied consent and that the issue is not properly before the Agency. 5

6 Under these circumstances, it is clear that the issue was not fairly and fully litigated at [the] hearing and therefore cannot be the basis for a sanction. Yellow Freight System, Inc., v. Martin, 954 F.2d 353, 358 (6th Cir. 1992). As the Sixth Circuit further explained: [A]n agency may not base its decision upon an issue the parties tried inadvertently. Implied consent is not established merely because one party introduced evidence relevant to an unpleaded issue and the opposing party failed to object to its introduction. It must appear that the parties understood the evidence to be aimed at the unpleaded issue. Id. (citing MBI Motor Co., Inc. v. Lotus/East, Inc., 506 F.2d 709, 711 (6th Cir. 1974)). Moreover, where the Government s case focus[es] on another issue and [the] evidence of [an] uncharged violation [is] at most incidental, the Government has not satisfied its constitutional obligation to provide a full and fair opportunity to litigate the issue and it cannot rely on the incidental issue as a basis for imposing a sanction. CBS Wholesale Distributors, 74 FR 36746, (2009) (quoting Pergament United Sales, Inc., v. NLRB, 920 F.2d 130, 136 (2d Cir.1990) (quoting NLRB v. Majestic Weaving Co., 355 F.2d 854, (2d Cir. 1966))). Thus, because the issue was not properly raised and the evidence was at most incidental, I reject the ALJ s legal conclusion (and his discussion of Ohio law) that Respondent violated Ohio law because she failed to obtain an Ohio Terminal Distributor s license. However, the ALJ also concluded that Respondent violated federal law because she dispensed or directed and authorized the dispensing of controlled substances from an unregistered location on numerous occasions between November 2008 and May ALJ at 24 (citing 21 U.S.C. 822(a)(2) & (e); id. 841; 21 CFR ). The ALJ offered no further explanation for this conclusion. While I hold that the ALJ erred in concluding that she violated section 822(e), which requires [a] separate registration... at each principal place of business or professional practice where the applicant... dispenses controlled substances, 21 U.S.C. 6

7 822(e), the record clearly supports a finding that Respondent s dispensing activities violated the CSA. The evidence of record shows that Respondent s dispensary was located at the same address as her medical practice. This was also the address at which Respondent was registered with the Agency. 7 See GX 1. Thus, Respondent did not violate the requirement that she obtain a separate registration for each principal place of professional practice where she dispensed controlled substances. Rather, Respondent violated the CSA because she exceeded the authority granted by her registration when she dispensed controlled substance prescriptions issued by her father without holding a pharmacy registration. Under 21 U.S.C. 822(b), [p]ersons registered by the [Agency] under this subchapter to... dispense controlled substances... are authorized to possess... or dispense such substances... to the extent authorized by their registration and in conformity with the other provisions of this subchapter. (emphasis added). Under Federal law and DEA regulations, a registered physician is authorized to prescribe, administer or dispense directly to her patients in the course of professional practice. See 21 CFR (b) ( An individual practitioner may administer or dispense directly a controlled substance listed in Schedule II in the course of his professional practice without a prescription.... ); id (b) ( An individual practitioner may administer or dispense directly a controlled substance listed in Schedule III, IV, or V in the course of his/her professional practice without a prescription.... ). See also 21 U.S.C. 829 ( Except when dispensed directly by a practitioner, other than a pharmacist, to an ultimate user, no controlled substance in schedule II, 7 There is no evidence that the dispensary had a separate suite number as might be the case in a large medical office building. 7

8 which is a prescription drug under the Federal Food, Drug, and Cosmetic Act... may be dispensed without a prescription); id. 829(b) (schedule III & IV). In addition, DEA regulations provide that [a] prescription for a controlled substance may only be filled by a pharmacist, acting in the usual course of his professional practice and either registered individually or employed in a registered pharmacy, or registered institutional practitioner. 21 CFR Accordingly, Respondent, who did not hold a pharmacy registration, exceeded the authority of her registration because she authorized her employees to fill prescriptions issued by her father. 8 See 21 U.S.C. 822(b); id. 841(a) (rendering unlawful the knowing or intentional dispensing of a controlled substance [e]xcept as authorized by this subchapter ). And in filling her father s prescriptions, she also violated 21 CFR So too, Respondent violated Ohio law because she allowed unlicensed personnel to fill the prescriptions and failed to personally furnish the controlled substances to her patients. 9 See ALJ at As the ALJ found, Respondent used unlicensed personnel to fill the prescriptions which her dispensary delivered to her patients. While Ohio law exempts a prescriber, which includes a physician who is authorized to practice medicine and prescribe drugs, see Ohio Rev. Code Ann (I), from the prohibition against the unauthorized practice of pharmacy under Ohio Rev. Code Ann , the exemption requires that the physician personally furnish[] the [prescriber s] patients with drugs, within the prescriber s scope of professional practice. Id (A)(1). 10 Moreover, [w]hen a prescriber personally furnishes drugs to a 8 The evidence also showed that Respondent s father did not hold a registration at the address of Respondent s dispensary. 9 In contrast to the issue of whether Respondent was required to hold an Ohio Terminal Distributor s license, the Government provided notice of its intent to litigate the issue of Respondent s use of unlicensed individuals to fill controlled substance prescriptions. ALJ Ex. 5, at This citation, as well as the citation to section (B), are to the provisions which were in effect during the period at issue here. 8

9 patient pursuant to [the exemption], the prescriber shall ensure that the drugs are labeled and packaged in accordance with state and federal drug laws and any rules and regulations adopted pursuant to those laws. Id (B). Respondent did present evidence that she had a security camera system and monitor in her office which allowed her to observe the operation of her dispensary. See Resp. Br. 3 (citing Tr. 400). However, given that she was actively seeing patients, her counsel s suggestion that she observed the actually delivery of the drugs to the patients, and thus was in compliance with Ohio s requirement that she personally furnish the drugs, is, as a factual matter, ludicrous. I thus hold that she violated Ohio law because she did not personally furnish the controlled substances to her patients. 11 In her brief, Respondent further claims that she was ill-advised by counsel as to whether she needed a pharmacy registration and was specifically told she was doing everything correctly with respect to operating the dispensary. Resp. Br. 7. Respondent then maintains that [i]f a mistake was made it was not the Respondent s. Id. While the ALJ recounted the testimony of one Respondent s employees regarding the purported legal advice she received, see ALJ at 17 (citing Tr. 545, ), he did not address Respondent s contention. I do and I reject the contention. Even crediting the testimony of Respondent s employee that he had a discussion with an attorney regarding the dispensary s compliance with DEA regulations and was told that we were doing it perfectly, Tr. 545, the employee s testimony was exceedingly vague as to what issues were discussed and does not establish that Respondent 11 As for the other violations, I agree with the ALJ s conclusions that Respondent failed to properly complete DEA Form 222s for the schedule II controlled substances she purchased, and that the records were not kept separate from other records as required by DEA regulations. See ALJ at (citations omitted). I also agree with the ALJ s conclusion that Respondent failed to include required information on some prescriptions. See ALJ at 30 (citing GX 7). 9

10 discussed whether she needed to obtain a DEA pharmacy registration because she was filling the prescriptions issued by her father. Thus, even were the Agency to recognize a defense of good faith reliance on legal advice, the defense fails here because Respondent has not established that there was a full disclosure of all pertinent facts to the attorney and that her reliance was in good faith. United States v. Lindo, 18 F.3d 353, 356 (6th Cir.1994); see also United States v. Painter, 314 F.2d 939, 943 (4th Cir. 1963). Indeed, the contention is belied by the employee s testimony that he really didn t trust some of the opinions [he] was getting from the attorney and that upon looking at the DEA rules, he determined that Respondent s father had to be registered at her clinic if narcotics were stored there. 12 Tr Moreover, because Respondent invoked her Fifth Amendment privilege and declined to answer any questions (other than to state her name and that she had a registration as an individual practitioner), she cannot establish that she relied in good faith on the attorney s advice. The Inventory Violations The ALJ found that Respondent violated DEA regulations requiring that she take initial and biennial inventories. ALJ at While I agree that the evidence establishes various violations, I find much of the ALJ s discussion of the evidence and his reasoning confusing. The ALJ found that Respondent did not have an initial inventory as required by DEA regulations. See ALJ at 27 (citing 21 CFR (b) & (c)). While I adopt this finding, I do so based solely on the evidence that when the Board of Pharmacy Compliance Agent conducted his February 9, 2011 inspection, Respondent s dispensary manager stated that one had not been done. Tr Under Federal law, every registrant... shall... as soon... as such 12 Having concluded that the Government did not provide adequate notice of its intent to litigate the issue of whether Respondent was required to hold a Terminal Distributor s license, it is unnecessary to decide the issue of whether Respondent properly relied on the statement of an Ohio Pharmacy Board employee that Respondent did not need to hold this license. Tr

11 registrant first engages in the... dispensing of controlled substances, and every second year thereafter, make a complete and accurate record of all stocks thereof on hand. 21 U.S.C. 827(a). Moreover, under DEA regulations, [i]n the event a person commences business with no controlled substances on hand, he/she shall record this fact as the initial inventory. 21 CFR (b). While under DEA regulations, a registrant is required to keep, and make available for inspection, an inventory for only two years, see 21 U.S.C. 827(b), a period which, given the evidence that Respondent opened the dispensary in November or December 2008, would have lapsed at the time of the February 2011 inspection, the statement of the dispensary manager is sufficient to find that this violation occurred. Moreover, by the date of the February 2011 Pharmacy Board inspection, Respondent was required to have performed a biennial inventory. See id. 827(a); 21 CFR (c). However, while Respondent had an on-hand inventory that was within the computer itself, Tr. 314, this did not comply with DEA regulations which require that an inventory be maintained in written, typewritten, or printed form. 21 CFR (a). And while there is evidence showing that during the May 2011 search, documents that were labeled as biannual inventories were seized, the fact remains that Respondent was required to have on hand a proper biennial inventory at the time of the February 2011 inspection Had Respondent produced at the February 2011 inspection an inventory which complied with 21 CFR (a) & (c), I would not place any weight on the fact that the inventory was labeled as a biannual rather than biennial. The ALJ further noted that it was [o]f significance, [that] no invoices, DEA Form 222s, or dispensing logs were used to conduct the biennial inventory. ALJ at 28 (citing Tr ). However, while the CSA requires that a registrant retain its invoices, form 222s, as well as a dispensing log, for at least two years, see 21 U.S.C. 827(b), taking an inventory does not require doing anything more than counting the drugs on hand and making a record which includes the information required under 21 CFR (e). The ALJ further concluded that no compliant... biennial inventory was... seized during the May 17, 2011 search. ALJ at 28. However, the DI who seized the inventories during the May 17, 2011 search did not offer any testimony that the inventories were not compliant other than because they were not done within two years of the opening of the dispensary. Tr. 84. The ALJ further noted the testimony of one of Respondent s employees that the process to conduct a biennial inventory consisted of [her] husband using a computer printout while she physically 11

12 Conclusion Having adopted the ALJ s conclusion (as modified herein) that Respondent violated the CSA by dispensing thousands of controlled substance prescriptions issued by her father and thus acted outside of the authority granted by her registration, I conclude that this conduct is egregious and warrants the conclusion that she has committed acts which render her continued registration inconsistent with the public interest and is sufficient by itself to support the revocation of her registration. See 21 U.S.C. 824(a)(4). The additional violations established on this record her failure to have inventories, failure to complete form 222s, failure to include required information on prescriptions, her commingling of schedule II records with other records, as well as her state law violations of failing to personally furnish the drugs to her patients buttress this conclusion. Because I further adopt the ALJ s findings that Respondent has presented no evidence that she accepts responsibility for her misconduct, I will order that her registration be revoked and that any pending application be denied. 14 ORDER Pursuant to the authority vested in me by 21 U.S.C. 824(a)(4) and 28 CFR 0.100(b), I order that DEA Certificate of Registration BT , issued to Margy Temponeras, M.D., be, counted the controlled substances, adding that she did not document anything from the inventory. ALJ at 28 (quoting ). It should be noted that even if the counts matched the printout, at a minimum, the inventories would have been required to document whether they were done on the opening of business or on the closing of business. See 21 CFR (a). However, because the inventories were not submitted into evidence, there is no basis for concluding that they did not contain the required information. 14 The ALJ noted that Respondent did not present any evidence demonstrating that she will not engage in future misconduct. ALJ at 31. This is not entirely accurate as the record suggests that following the February 2011 visit of the Pharmacy Board s Compliance Agent, her employees did take inventories. However, Respondent did not put on any other evidence as to remedial measures and her failure to testify warrants, as the ALJ held, the adverse inference that she does not accept responsibility for her misconduct. See id. (citing cases). 12

13 and it hereby is, revoked. I further order that any pending application of Margy Temponeras, M.D., to renew or modify her registration, be, and it hereby is, denied. This Order is effective [insert DATE THIRTY DAYS FROM DATE OF PUBLICATION IN THE FEDERAL REGISTER]. Dated: July 24, 2012 Michele M. Leonhart Administrator 13

14 D. Linden Barber, Esq. & Frank Mann, Esq., for the Government Bradley Davis Barbin, Esq., for the Respondent RECOMMENDED RULING, FINDINGS OF FACT, CONCLUSIONS OF LAW AND DECISION OF THE ADMINISTRATIVE LAW JUDGE I. INTRODUCTION Timothy D. Wing, Administrative Law Judge. This proceeding is an adjudication pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., to determine whether the Drug Enforcement Administration (DEA, Agency or Government) should revoke a physician s DEA Certificate of Registration (COR) as a practitioner pursuant to 21 U.S.C. 824(a)(4) and deny, pursuant to 21 U.S.C. 823(f), any pending applications for renewal or modification thereof and any application for a new COR. Without this registration, Margy Temponeras, M.D. (Respondent), of Wheelersburg, Ohio, will be unable to lawfully prescribe, dispense or otherwise handle controlled substances in the course of her practice. On May 16, 2011, the Administrator, DEA, issued an Order to Show Cause and Immediate Suspension of Registration (OSC/IS), which was personally served upon Respondent on May 17, The OSC/IS immediately suspended Respondent s DEA COR as a practitioner, and also provided notice to Respondent of an opportunity to show cause as to why the DEA should not revoke Respondent s COR, pursuant to 21 U.S.C. 824(a)(4), and deny, pursuant to 21 U.S.C. 823(f), any pending applications for renewal or modification thereof and any applications for a new COR, alleging that Respondent s continued registration is inconsistent with the public interest as that term is defined in 21 U.S.C. 823(f). The OSC/IS alleged that Respondent is registered as a practitioner authorized to handle controlled substances in Schedules II through V under DEA COR BT ALJ Exs. 1, 3. 14

15 The OSC/IS further alleged in relevant part: 2 That between approximately January 1, 2007 and November 3, 2009, Respondent made approximately 3,397 unauthorized distributions of controlled substances. These distributions from Respondent s registered location were purportedly based on prescriptions issued by Dr. John Temponeras, who is registered with DEA as a practitioner in Portsmouth, Ohio. Respondent is not registered with DEA as a pharmacy. All in violation of 21 U.S.C. 841 and 21 C.F.R ; That Respondent failed to take an initial inventory and biennial inventories of the controlled substances in the dispensary that Respondent operated in violation of 21 C.F.R (b) and (c); That Respondent failed to make and keep complete and accurate records of the receipt of controlled substances by, among other things, failing to complete DEA Form 222 with the amount and date received of controlled substances in violation of 21 C.F.R (e); and That Respondent frequently issued prescriptions for controlled substances that did not contain all of the information required by 21 C.F.R (a). 3 Following prehearing procedures, a hearing was held in Cincinnati, Ohio between September 13, 2011, and September 14, 2011, with the Government and Respondent each represented by counsel. Both parties called witnesses to testify and both introduced documentary evidence. After the hearing, both parties filed proposed findings of fact, conclusions of law, and argument. All of the evidence and post-hearing submissions have been considered, and to the extent the parties proposed findings of fact have been adopted, they are substantively incorporated into those set forth below. 2 The Government represented prior to hearing that it intended to proceed against Respondent only with regard to allegations contained in numbered paragraphs two, eight, nine, and ten of the OSC/IS. 3 The section requires in relevant part that [a]ll prescriptions for controlled substances shall... bear the full name and address of the patient... [and] directions for use

16 II. ISSUE Whether the record establishes that Respondent s DEA COR BT as a practitioner should be revoked and any pending applications for renewal or modification of that registration should be denied on the grounds that Respondent s continued registration would be inconsistent with the public interest as that term is used in 21 U.S.C. 824(a)(4) and 823(f). III. EVIDENCE AND INCORPORATED FINDINGS OF FACT 4 I find, by a preponderance of the evidence, the following facts: A. The Government s Evidence The Government s evidence included testimony from five witnesses: Respondent; DEA Diversion Investigator (DI) Christopher Kresnak (DI Kresnak); DI Paula Albert (DI Albert); Ohio State Board of Pharmacy Compliance Agent Joseph Kinneer (Agent Kinneer); and DI Stephanie Burkhart (DI Burkhart). In addition to testimonial evidence, the Government also introduced various documentary exhibits, to include: Respondent s COR record; 5 three DEA Form 222 purchaser records; 6 copies of prescriptions issued by Respondent between August and November 2006; 7 and a document reflecting standard procedures for Unique Pain Management. 8 4 In addition to the evidence discussed in this Section, additional evidence and findings of fact are discussed in later Sections of this Recommended Decision. 5 Gov t Ex Gov t Ex Gov t Ex Gov t Ex

17 Respondent was called to testify but refused to answer any questions related to the relevant allegations in the OSC/IS by asserting her Fifth Amendment privilege. (Tr ; ) DI Kresnak testified in substance that he has approximately eight years of experience with DEA as a DI. (Tr.45.) DI Kresnak testified that Respondent is registered with DEA as a practitioner under DEA COR BT with an expiration date of November 30, 2012, and a current status listed as under suspension. (Tr. 47; Gov t Ex. 1.) DI Kresnak further testified that Respondent has never held any other type of DEA registration, including a pharmacy registration. (Tr. 48.) Respondent has never been registered with the State of Ohio as a pharmacist and has never held a pharmacy license in Ohio. (Id.) DI Kresnak next testified that Respondent owns and operates two limited liability companies her medical practice, Unique Pain Management, and her dispensary, Unique Relief. (Tr ) Both of Respondent s businesses are located in the same building at 418 Center Street, Wheelersburg, Ohio. (Tr. 49.) DI Kresnak testified that he was present inside both businesses on May 17, 2011, and he described the physical layout of the location to include Respondent s office on the far left hand corner from the entrance, with the dispensary... on the right-hand side of the building,.... (Tr ) DI Kresnak testified that he interviewed Respondent on that same day, and in response to a question about why the dispensary was operating, Respondent said words to the effect that many of the local pharmacies stopped filling for her prescriptions and that she wanted to provide a low-cost convenience for her patients. (Tr. 52.) DI Kresnak also testified that pursuant to a search warrant at Prime Pharmacy Group d/b/a Medi-Mart Pharmacy, in Portsmouth, Ohio, he obtained prescriptions covering the time 17

18 period 2005 to 2006 for Schedule III through V controlled substances, and identified twelve controlled substance prescriptions issued by Respondent. (Tr. 53, ) The twelve prescriptions related to more than one patient, but DI Kresnak did not know how many patients exactly, nor could he recall any of the patients names. 9 (Tr. 118, 188.) DI Kresnak testified that of the twelve prescriptions, only one was compliant with DEA regulations. Eleven were noncompliant because they lacked a patient address. (Tr. 54; ) DI Kresnak next explained that DEA Form 222s are used by industry to order Schedule II controlled substances, and are issued to registrants by DEA. (Tr. 55.) DI Kresnak testified that a DEA Form 222 contains, among other information, the name and address of a registrant, what the registrant is authorized to order, and a serial number. (Tr. 56.) A DEA Form 222 consists of three copies: the brown sheet, which goes to the distributor; a carbonated second green copy, which also goes to the distributor; and a blue copy, which is maintained at the registrant or practitioner s registered address when the registrant or practitioner orders Schedule II controlled substances. (Tr ) DI Kresnak further explained that the distributor completes relevant information on the Form 222 at time of shipping, to include the National Drug Code (NDC) and number of controlled substances shipped. (Tr. 58.) The distributor then sends the green carbonated copy to the DEA office where the distributor is located. (Tr. 58.) 9 None of the twelve prescriptions were produced by the Government at hearing, and DI Kresnak was uncertain if any of the twelve were the same as those contained in Government Exhibit 7. (Tr ) Respondent requested production of the records at hearing and the Government objected, arguing in substance the lack of legal authority for such a discovery request. I denied Respondent s discovery request since it was untimely and unsupported by applicable legal authority. There is no general right to discovery under either the APA or DEA regulations, but rather only a limited right to receive in advance of hearing the documentary evidence and summaries of the testimony which the Government intends to rely upon. Roy E. Berkowitz, M.D., 74 Fed. Reg. 36,758, 36,760 (DEA 2009) (citing Nicholas A. Sychak, d/b/a Medicap Pharmacy, 65 Fed. Reg. 75,959, 75,961 (DEA 2000). Respondent made various untimely requests for discovery throughout hearing with regard to other documents, such as original Form 222s, which were denied for similar reasons. 18

19 DI Kresnak testified that he reviewed approximately fifty DEA Form 222s seized from Respondent s dispensary, and on approximately six to ten forms he observed various discrepancies: Many of them weren t filled out properly, missing information. Several of them didn t even indicate whether a shipment had been received. One... just doesn t reflect anything. There were several, maybe seven lines filled out on it and there s nothing indicating any product was received. (Tr. 60.) DI Kresnak compared the green copies of DEA Form 222s sent to DEA by the distributor with those seized from Respondent s dispensary, and testified that he recalled a specific discrepancy: I observed one particular where the distributor indicated that they [sic] did not fill the order. The blue copy of the 222, which is found in the dispensary, which is required by the Code to fill out how many is [sic] received, indicated that there were 60 received. There were 60 ordered. The blue copy was indicating 60 received, but the distributor s copy to DEA indicate[d] they did not fill that order. (Tr. 63.) DI Kresnak further testified that he reviewed data from DEA s Automated Reports and Consolidated Order System (ARCOS), 10 which confirmed that the information reflected on the distributor s DEA Form 222 was accurate. (Tr ) DI Kresnak also testified about three specific DEA Form 222s seized from Respondent s dispensary on May 17, 2011, which he found to be deficient. (Tr ; Gov t Ex. 6.) DI Kresnak testified that one was deficient [i]f these drugs were received... [because] a date received is omitted. (Tr. 65; Gov t Ex. 6, at 1.) A second form is deficient because the number of packages received is omitted and 10 Registrants are also required to report records of sales or acquisitions of controlled substances in Schedules I and II, of narcotic controlled substances listed in Schedules III, IV and V, and of psychotropic controlled substances listed in Schedules III and IV with the DEA s Automation of Reports and Consolidated Orders System (ARCOS). 21 C.F.R (c); 21 U.S.C. [ ] 827(d). These reports must be filed every quarter not later than the 15th day of the month succeeding the quarter for which it is submitted. 21 C.F.R (b). Easy Returns Worldwide, Inc. v. United States, 266 F. Supp. 2d 1014, 1016 (E.D. Mo. 2003). 19

20 the date received is omitted. (Tr. 66; Gov t Ex. 6, at 2.) A third form is deficient because the number of packages is omitted on both items and the date received. (Tr. 66; Gov t Ex. 3, at 3.) DI Kresnak further testified somewhat tepidly with regard to whether the controlled substances were actually shipped to Respondent, that he believed they were further explaining that he believed we found documentation that these were shipped, yes. 11 (Tr. 82.) DI Kresnak testified that during the first two years that Respondent operated her dispensary, the majority of Respondent s ordering was completed through an electronic DEA controlled substance ordering system (CSOS), rather than using paper Form 222s. (Tr ) 12 DI Kresnak next testified that during the search of Respondent s dispensary, documents related to inventories were found, to include one marked opening inventory, which indicated that the date that they opened the dispensary there was a zero inventory. (Tr. 83.) No biennial inventory was ever found. (Tr. 84.) Rather, several documents entitled Biannual Inventories were found in a folder marked DEA inventories. (Tr. 144.) DI Kresnak testified that Respondent s dispensary opened sometime in November 2008, maybe December (Tr. 99.) Although DI Kresnak could not recall all of the details, he testified that the inventories appeared to be computer generated, listing the drugs on the far left and dollar values in another column. DI Kresnak did not know what the dollar values represented. He also testified that each inventory was marked biannual, contained a date, and appeared to be signed by Respondent. (Tr ) DI Kresnak testified that as a result of his investigation he determined that there was one particular oxycodone product that 100% was missing for the month of April, (Tr. 150.) DI Kresnak further explained that he does not recall the 11 DI Kresnak s testimony was further qualified by his statement that [w]e found invoices that reflect some of these. (Tr. 83.) Additionally, DI Kresnak explained that ARCOS reports indicated shipments of the relevant controlled substances to Respondent. (Tr ) C.F.R DI Kresnak explained that CSOS is only for Schedule II controlled substances and is used to eliminate paper flow. (Tr. 194.) 20

21 number of dosages... missing... without referring to the audit. 13 (Tr. 153.) DI Kresnak testified that he has not seen any inventories in electronic format seized from Respondent, but noted that he has not as yet looked for any. (Tr. 173.) DI Kresnak next testified that Respondent and Respondent s father, Dr. John Temponeras, were the only practitioners who issued prescriptions for controlled substances in Schedules II through V that were filled at Respondent s dispensary. (Tr. 101.) DI Kresnak further testified that Dr. John Temponeras had previously been a DEA registrant with a registered location in Portsmouth, Ohio. DI Kresnak interviewed Dr. John Temponeras regarding his application for a DEA registration at Respondent s Center Street location in Wheelersburg, Ohio, and learned he had written prescriptions [for controlled substances] that were filled at the dispensary, and he basically said he was needing a DEA registration at that location because his daughter said he needed one there. (Tr. 102.) DI Albert testified in substance that she has eleven years of experience with DEA as a diversion investigator. DI Albert testified that she was present at Respondent s business location in Wheelersburg, Ohio, on May 17, 2011, assisting in the execution of a federal search warrant and service of the OSC/IS. (Tr. 202.) DI Albert described the location as a medical clinic and a I guess, a dispensary. (Tr. 202.) By dispensary, DI Albert testified that she meant [t]hey filled prescriptions and dispense[d] medication to patients. (Id.) The location was described as having the doctor s office on the left of the building, and on the right after passing through a door there was another lobby and [i]nside that lobby there was a set of windows with thick glass, and behind those windows were [sic] the dispensary. (Tr. 203.) DI Albert further testified that Darryl Leadingham (Mr. Leadingham) and Sue Leadingham (Mrs. Leadingham) were working in the dispensary on May 17, DI Albert interviewed Mr. Leadingham 13 No audit was produced at hearing. 21

22 regarding his responsibilities in the pharmacy, and learned that he was responsible for the computer system, the security system in the whole building, the cameras.... [H]e ordered the controlled substances that were dispensed out of the dispensary, and he also worked as far as entering patient information into the computer system, printing labels, dispensing the controlled substances, billing patients insurance,.... (Tr ) In terms of dispensing, Mr. Leadingham indicated that patients would bring a physical hard copy prescription that either Respondent or Respondent s father had issued with an original signature. The information was entered in the computer system which would generate three labels, the first for the prescription bottle, second for the original hard copy prescriptions, and third on the outside bag containing all of the bottles of medicine distributed. (Tr. 208.) DI Albert testified that Mrs. Leadingham similarly stated that she was there to dispense the medication and put the information, print the labels and bill the insurance or accept cash. (Tr. 209.) DI Albert further testified that both Mr. Leadingham and Mrs. Leadingham stated during the May 17, 2011 interview: Dr. John Temponeras had filled in and had seen [Respondent s] patients and that there were prescriptions that patients brought to the dispensary with [Dr. John Temponeras ] name on them. And Darryl Leadingham told me that at some point he figured out that it was no longer or that they shouldn t be doing that and that he had told [Respondent] that her father needed to get his own DEA registration for that location. (Tr. 213.) DI Albert testified that based on information contained within the Ohio Automated Rx Reporting System (OARRS), 14 the only prescriptions filled at the dispensary were issued by Respondent or Respondent s father. (Tr. 209.) DI Albert testified that OARRS data reflected that from November or December 2008 until 2011, Respondent s dispensary filled approximately 3,397 prescriptions issued by 14 DI Albert testified that OARRS is a prescription monitoring system run by the Ohio Board of Pharmacy based on information submitted by pharmacies. (Tr ) See also Ohio Admin. Code R (2011). 22

23 Respondent s father for controlled substances, mostly oxycodone products and Xanax or the Schedule IV. (Tr ) Regarding prescriptions issued by Respondent, DI Albert testified in April 2010 alone, Respondent filled 500 prescriptions at her dispensary, which came out to after I compared that to other pharmacies, it was over eighty-three percent of her prescriptions were filled by herself. (Tr. 211.) DI Albert did not know why eighty-three percent of the patients chose to go to Respondent s dispensary and no cost analysis of pharmacies in the region was conducted by DI Albert. (Tr. 231.) DI Albert next testified that as part of her investigation of Respondent, she reviewed ARCOS system data pertaining to all the oxycodone products [Respondent] ordered from the opening of the dispensary in 2008 until her last order in May 2011, finding a total of approximately 1.6 million dosage units of oxycodone, a Schedule II controlled substance. (Tr ) DI Albert testified that she recalled the presence of various drugs at the dispensary on May 17, 2011, described as mostly controlled substances, oxycodone, OxyContin, benzos, [15] Xanax, Valium. (Tr. 204.) DI Albert believed there may have been a small quantity of hydrocodone and a couple of other Schedule II substances, such as morphine. (Tr ) DI Albert further testified that she has reviewed the originals of the DEA Form 222s reflected in Government Exhibit 6, which were seized from Respondent s dispensary on May 17, 2011, and did not remove any attachments from the originals nor was she aware of any other DEA personnel removing attachments. (Tr. 215.) DI Albert testified that she reviewed and compared distributor copies of the Form 222s with copies retained by Respondent, and found discrepancies between what the distributors indicated they shipped and what Respondent reported receiving. (Tr ) DI Albert elaborated: I believe there were times where on the distributor s copy, or the one that [the distributor] provide[d] to DEA, it indicates that they actually shipped a different quantity 15 DI Albert explained her use of the term benzos was short-hand for benzodiazepines, a Schedule IV controlled substance. (Tr. 205.) 23